VW Settlement May Bring More Ro/Ro Cargo to Baltimore

On Wednesday, the state of Maryland and Volkswagen filed a settlement agreement that will require the German automaker to pay $29 million and to import VW cars through the Port of Baltimore for at least five years. The Maryland consent decree - the state's largest civil settlement ever for pollution - penalizes VW for designing passenger vehicle diesel engines to evade American NOx emission limits.

“Volkswagen, Audi and Porsche installed defeat devices in their cars to trick regulators, to deceive the public, to defraud thousands of Maryland consumers and to spew massive amounts of pollution into our air,” said Attorney General Frosh. “This settlement is just one of several brought by Maryland against Volkswagen and should send a clear message to auto manufacturers that violating laws designed to protect our environment and the health of our citizens is unacceptable and will result in harsh penalties.”

In addition to the $29 million civil penalty and a promise to offer electric vehicles for sale, VW must select a "Maryland-based port facility" to provide logistical and other support to its American affiliate. Unless it reaches a five-year agreement for ro/ro services worth $4.5 million to Maryland's economy, it will have to pay the state an additional $4.5 million.

The Port of Baltimore is Maryland's ro/ro port, and it is the busiest facility in this cargo category in the United States. While it handles cars for all of VW's major competitors, Baltimore has not hosted Volkswagen Group imports in many years. The automaker routes its shipments through other U.S. East Coast and West Coast ports, and the settlement would incentivize it to return its business to Maryland.

Baltimore would not be the only port to benefit from the VW scandal's fallout. Many state and local authorities benefit from other, related settlements with VW, and some - like the state of Washington - could use the money to underwrite new low-emissions drayage trucks, cargo handling equipment and tugboats.

Emissions defeat devices

VW has admitted to designing its diesel engine control software on certain TDI models to detect EPA emissions testing patterns, based on steering wheel position, vehicle speed, duration of the engine's operation and barometric pressure. When standard dynamometer tests were detected, the engine control software would tune the car's emissions control system to minimize NOx output. During ordinary driving, the software would detect "road conditions" and reduce the effectiveness of the car's emissions controls, which increased NOx emissions to levels 10-40 times higher than those permitted by the EPA. In first-generation TDI models, this allowed the engines to run a leaner fuel mixture during everyday driving, thereby improving fuel economy.

The "defeat device" software was included in about 500,000 vehicles with 2.0L diesels between 2009 and 2015, including the VW Jetta, VW Passat, VW Beetle and Audi A3. VW faces state and federal liability for the fraud, in addition to penalties in the EU for comparable violations.